Equity release options for over 55s

In 2019, a total of 85,497 homeowners over the age of 55 released equity from their home. This year numbers are expected to increase dramatically, with the Equity Release Council’s latest report revealing that there were 40,337 new equity release plans agreed in 2020, compared to 44,870 in 2019.

What is Equity Release? 

Equity Release allows homeowners over the age of 55 to release a lump sum from the value of their property without having to work longer, sell their property, downsize or even give up ownership, allowing them to enjoy their retirement.

What is Equity Release used for? 

Equity Release can play a big part in retirement, ensuring that people have a tax-free disposable income so that they can do what they’ve always planned. It can also be used for:

  • Existing mortgage and bills so you can potentially retire early
  • Luxuries that retirement income doesn’t usually stretch to
  • Home and garden improvements that add value to your home
  • Financial support for your family and for important life events

How does Equity Release work?

You can choose a tax-free lump sum to spend how you wish or you might prefer to take the money in instalments so that you can access further money later, as and when you need it.

A Lifetime Mortgage is the most popular type of Equity Release and is only paid off when you die or if you need to move out of the property into long term care.

The Lifetime Mortgage is secured against your home and may offer an option of Inheritance Protection Guarantee which allows you to preserve a portion of your home’s value as an inheritance.

A Home Reversion Plan allows you to receive part or all of the value of your home whilst still being able to live in the property. The provider who buys your property will provide a lifetime lease which allows you to continue to live in the property rent-free for the remainder of your life.

Could you qualify for Equity Release?

You must..

  • Be aged 55 or over- both applicants if a couple
  • Own and live in the property you wish to release equity from
  • Be able to release enough equity from your property to enable you to fully clear any outstanding mortgage or Secured Loan

Your property must be..

  • Valued at least £70,000
  • In the UK (including Northern Ireland)
  • Either freehold or leasehold, with a minimum lease period of 75 years remaining
  • Of standard construction and in good condition

Your specialist Equity Release adviser at Cornerstone Finance will explain:

  • You have to get advice before releasing tax-free cash from your home – please read all our information and make sure it’s right for you
  • All of our plans meet the Equity Release Council standards and come with several protections, including the no negative equity guarantee, which means you’ll never owe more than your home’s value